CONSUMER DISPUTES REDRESSAL FORUM
PALAKKAD, KERALA
Dated this the 7th day of July, 2012.
Present: Smt. Seena. H, President
: Smt. Preetha. G. Nair, Member
: Smt. Bhanumathi. A. K, Member Date of filing: 10/08/2009
CC / 92/ 2009
M/S.Associated Steel Industries,
Rep.by its Managing Partner Mr.P.P.Muhammad - Complainant
S/o.Moidu, 4/468 Kolikkottusseri,
Pattambi, Palakkad.
(BY ADV.P.Gopinath)
Vs
1. M/s.Reliance General Insurance
Company Limited, First Floor,
Vishnu Building,
K.P.Vallon Road, Kadavanthra,
Cochin-682 020.
(BY ADV. S.Mammu)
2. M/s.Oriental Insurance Company Limited, - Opposite parties
Rep.by its Manager
Kairali Tower, Mele Pattambi,
Ottappalam, Palakkad.
(BY ADV. P.K.Devadas)
O R D E R
BY SMT. SEENA.H, PRESIDENT
Complaint was once allowed by the forum directing opposite party to pay Rs.10,58,750/- being the balance claim amount along with Rs.20,000/- as compensation & Rs.1000/- as cost of the proceedings. Both the complainant and opposite party has taken up the matter in appeal, the former for enhancing compensation and the latter to set aside the order. Hon'ble State Commission set asided the order of the forum and remitted back for fresh disposal. After remand Suppl. opposite party No.2 was impleaded.
Complaint in brief:-
Complainant is the Managing Partner of Associated Steel Industries. Complainant availed a standard fire & special perils policy from opposite party No.1 and also availed another policy covering the same property from opposite party No.2 through the bank. On 5/8/2008, there was a fire in the factory which led to complete destruction of the property. A complaint was filed before the Pattambi Police Station. The police investigated the loss through PWD Engineer and it was assessed as Rs.29,00,000/-. According to the complainant he has sustained loss to the tune of Rs.35,00,000/-. Opposite party without any reason assessed damages as Rs.2,54,710/- and issued cheque for the said amount which was accepted by the complainant under protest. The assessor of the opposite parties visited the site without any notice to complainant. Complainant issued a lawyer notice dated 23/04/2009 to opposite party No.1 claiming the insurance amount of Rs.35,00,000/- but opposite party in their reply was sticking on to their assessment. The sum assured as per the policy is Rs.55,00,000/-. According to the complainant, the assessment made by the opposite party No.1 is without any basis. Complainant also sought relief against the 2nd opposite party for the reason that complainant was compelled to settle the claim with the 2nd opposite party as the bank want to realize the due amount. The act of opposite parties amounts to clear deficiency on their part and hence the complaint.
Contention of opposite party No.1
Opposite party admitted the policy and the incident. According to the opposite party, the complainant has availed another standard fire and special perils policy from the Oriental Insurance Co.Ltd, Pattambi. Under the said policy the stock, plant and machinery and building were insured for Rs.15,00,000/-, Rs.20,00,000/- and Rs.10,00,000/- respectively. Complainant suppressing this fact has filed this complaint. Without impleading Oriental Insurance Company in the party array, complaint is bad for non joinder of necessary party. After remand opposite party No.2 was impleaded.
The policy issued by opposite party is for the period 1/1/2008 – 31/12/2009 for building machinery, stock of raw materials and finished goods for a sum of Rs.15,00,000/- Rs.30,00,000/- and Rs.10,00,000/- respectively. On receipt of survey report and after obtaining consent from the complainant, claim was settled for Rs.2,54,710/-. The averment of the complainant that it was received under protest is denied by opposite party. It is also submitted by opposite party that the net assessment of loss by the surveyor after deductions was Rs.4,41,250/-. After deducting the liability of the Oriental Insurance Company, the liability of the opposite party was assessed as Rs.2,54,710/-. The amount was paid to the complainant as full and final settlement. Hence no deficiency of service on the part of the opposite party.
Contention of opposite party No.2:-
Opposite party No.2 admitted that the complainant has availed a Standard Fire & Special Perils Policy from them. The Surveyor deputed by opposite party No.2 has inspected the premises and assessed loss. Complainant and State Bank of India who is the financier for the complainant has agreed for a full and final settlement of the claim for Rs.1,10,000/- on 10/06/2009. Notarized affidavit and discharge voucher has been signed by the parties. Hence there is no deficiency in service on their part and complaint is liable to be dismissed.
The evidence adduced by the parties consists of their respective chief affidavits, Ext.A1 to A11, Ext.B1 to B 5, testimony of PW1, PW2, DW1 & DW2.
Issues for considerations :-
1. Whether there is any deficiency in service on the part of opposite parties?
2. If so, What is the relief and cost complainant is entitled to?
Issue No. I
On going through the rival submissions of both the opposite parties, it is understood that the policy and the happening of the incident with in the period of the policy is not disputed. According to the complainant, the loss assessed by the PWD Engineer is for Rs.29 Lakhs. Opposite parties on the other hand contented that the net loss assessed by them after depreciation is Rs.4,41,250/-. After deducting the liability of the Oriental Insurance Company, from whom the complainant has availed fire and standard perils policy, opposite party No.1 has paid Rs.2,54,710/- as full and final settlement of the claim.
Suppl. Opposite party No.2 on the other hand submitted that they have paid Rs.1,10,000/- as full and final settlement of the claim and the complainant has signed the discharge voucher as well as notarized affidavit for the same.
To determine whether there is any deficiency in service on the part of opposite parties, two issues has to be answered first. Firstly whether the assessment by the surveyors deputed by the opposite parties can be relied on? Secondly whether the complainant, after accepting part claim as full and final settlement as alleged by the opposite parties, can now come up with a case for balance payment.
On going through the evidence on record it is seen that there are three independent assessment as to the loss of the same building. As per Ext.B1 and B2, the Surveyor deputed by Reliance General Insurance Company and Oriental Insurance Company assessed loss is to the tune of Rs.4,41,250/-. The Assistant Engineer, PWD at the requisition of Sub Inspector of Pattambi Police Station has assessed loss to the tune of Rs.29 lakhs. DW 2 has deposed that the assessment is made as per the terms and conditions of the policy. PW1, on the other hand assessed loss as per the Govt.norms. PW1 has deposed with regard to the assessment of loss as follows:
“]Xn-\mev hÀjw ]g-¡-ap-ff _nÂUnwKv BsW-¶mWv Age Certificate-  Df-fXv. Rm³ sNÃp-t¼mÄ Outline Structure am{Xta DWm-bn-cp-¶p-Åq. Completely destroyed Bbn-cp-¶p. Building-sâ Plinth area X rate for a tiled roof as per technical circular of CE 2008 X depreciation constant for 14 years F¶ coXn-bn-emWv assess sNbvX-Xv. Calculation statement Bbn R§Ä¡v sImSp-t¡W Bh-i-y-an-Ã. Report am{Xta sImSp-t¡--WXp-Åq”. DW2 Investigator has deposed that “loss assess sN¿m³ guidelines H¶pw CÃ. Policy conditions sh¨m-Wv loss assess sNbvXXv. Age of the building IrX-y-ambn IW-¡m-¡n-bn-«n-Ã. Rs.250/-per sq.feet construction cost F¶Xv market rate FSp-¯-Xm-Wv. Rs.250/- F¶p-ffXn--\vv B[n-Im-cn-I-ambn tcJ-sbm-¶p-an-Ô.
We find that the assessment of loss by the surveyors deputed by the Insurance companies is not based on any specific norms, where as PW1 has assessed loss based on specific norms. More over the assessment made by the government official seems to be more reliable one since they lack any vested interest.
Again none of the surveyors has reported damage as to the machinery or stock in the buildings. Even though the complainant while cross examination has stated that loss of machinery was assessed by a technical expert and report is with the complainant, nothing was brought on record. Allegations of the complainant to that aspect stands unproved. So regarding the 1st point we are of the view that assessment made by PW1 is a more reliable one.
Secondly it is admitted by the complainant that he received Rs.2,54,710/- from opposite party No.1 & Rs.1,10,000/- from opposite party No.2. Now the question is whether it is the full and final settlement of the claim and whether the complainant is barred from claiming the balance amount.
Opposite party No.1 has relied upon the decision rendered by the Hon'ble National Commission and too other decisions, the crux of which is that a party is not debarred from claiming the balance amount when he can show that full and final settlement arrived at was on account of coercion, undue influence, misrepresentation etc. Complainant in the chief affidavit has stated that opposite party No.1 has sent the cheque by post and has received the same under protest. Opposite party No.1 has not adduced any evidence to prove that it was the full and final settlement at the claim. So we are of the view that above cases will not help opposite party No.1 in any way.
So far as opposite party No.2 is concerned, they have produced two documents viz Ext.B4 and B5, notarized affidavit and discharge voucher to show that it was the full and final settlement. Complainant has stated in the additional affidavit filed that Bank has taken the policy and he was compelled to sign full and final settlement as the bank wants to realize the amount due to them. So we find an element of undue influence in the above deal.
Sec 16 of the Indian Contract Act 1872 defines Undue Influence as follows:
Sec 16:- A contract is said to be induced by “Undue influence” where the relations subsisting between the parties are such that one of the parties is in a position to dominate the will of the other and uses that position to obtain an unfair advantage over the other.
Where a person who is in a position to dominate the will of another, enters into a contract with him, and the transaction appears, on the face of it or on the evidence adduced, to be unconscionable, the burden of proving that such contract was not induced by undue influence shall lie upon the person in a position to dominate the will of the other.
Here we can see that the Bank was in a dominant position to influence the will of the customer. Once it is shown that one of the parties is in a dominant position to influence the will of the other person it is the person who is in the dominant position to show that he has not misutilized that position. Hon'ble Supreme Court has clearly stated in National Insurance Company Ltd Vs Sehtia Shoes in Appeal 1602 of 2008 that once it is shown that there is an element of undue influence, coercion, misrepresentation etc in the deal, party is not debarred from claiming further amount.
It can be seen that within a few weeks itself complainant has caused lawyer notice to opposite party No.1 stating his grievance. But opposite party No.1 failed to satisfy the genuine claim of the complainant.
In view of the above discussion we are of the view that there is deficiency in service on the part of both opposite parties.
Issue No.2
Opposite parties having found deficient in their service, next question is with regard to the apportionment of the balance claim amount. Building was insured for Rs.10 lakhs with oriental insurance company and Rs.15 lakhs with Reliance Insurance Company. For Determining the balance claim we consider the maximum sum insured as the basis. Total amount already assessed to be paid by the opposite parties is Rs.4,41,250/-, out of which Rs.2,54,710/- was paid by 1st opposite party. 2nd opposite party has paid only Rs.1,10,000/- as per B4 & B5. But as the complainant has not claimed the balance amount, we are not dealing with the said issue. Adopting the same calculation as in Ext.B1 & B2, the sum due to Reliance insurance Company is
Rs.10,58,750 x Rs.15,00,000 = Rs.6,35,250/-
25,00,000
Oriental Insurance Co. = Rs.10,58,750 x Rs.10,00,000 = Rs.4,23,500/-
Rs.25,00,000
Complainant is also entitled for compensation of Rs.20,000/- from the opposite parties.
In the result complaint allowed. Opposite parties 1 & 2 is directed to pay an amount of Rs.6,35,250/- (Rupees Six lakh thirty five thousand two hundred and fifty only) & Rs.4,23,500/- (Rupees Four lakh twenty three thousand and five hundred only) respectively to complainant. Opposite parties are also directed to pay compensation of Rs.10,000/- (Rupees Ten thousand only) each and cost of Rs.500/- (Rupees Five hundred only) each to the complainant.
Order shall be complied within one month from the date of receipt of order, failing which the complainant is entitled for 9% interest per annum for the whole amount from the date of order, till realization.
Pronounced in the open court on this the 7th day of July, 2012
Sd/-
Smt. Seena. H
President
Sd/-
Smt. Preetha.G.Nair
. Member
Sd/-
Smt. Bhanumathi.A.K
Member
A P P E N D I X
Exhibits marked on the side of complainant
Ext. A1 - Carbon Copy of lawyer notice dtd.23/4/2009 issued to opposite party with
original postal receipt and acknowledgment card.
Ext. A2 – Original reply notice sent by the opposite party to the complainant's
counsel dt.11/5/09 with cover.
Ext.A3 –Original Policy No.2202382111100010 of the Reliance General Insurance Co.
Ext.A4 –Original Policy No.2202382911100002 of the Reliance General Insurance Co.
Ext.A5 – Copy of FIR in Cr.572/08 of Pattambi Police Station.
Ext.A6- Copy of the report of the Assistant Engineer, PWD Building Section
Pattambi, dt.1/4/09.
Ext.A7 - Copy of letter addressed to Assistance Engineer PWD Pattambi by SI of
Police Pattambi dt.10/10/08
Ext.A8 - Copy of certificate issued by Muthalamada Grama Panchayath dt.1/12/08.
Ext.A9 -Copy of plan of main building prepared by Shameer.A
Ext.A10- Copy of letter to SI, Pattambi by Asst.Engineer, PWD Building section
Pattambi.
Ext.A11- Copy of Technical Circular dt.18/1/08 of the Chief Engineer, PWD, NH and
Administration, Trivandrum.
Witness examined on the side of complainant
PW1- Smesha.P.P, Asst.Engineer, PWD Building Section, Pattambi.
PW2- P.P.Mohammed
Exhibits marked on the side of opposite parties
Ext. B1 – Survey Report of Babu.A.V, Insurance Surveyor dt.27/1/09
Ext. B2 - Survey Report of Dr.P.Sugumaran, Insurance Surveyor dt.12/1/09
Ext. B3 – Certified true copy of Standard Fire & Special Perils Policy Schedule of the Oriental Insurance Co.Ltd.
Ext. B4- Affidavit dt.10/06/09
Ext.B5 – Form of Discharge for fire loss of the Oriental Insurance Co.Ltd.
Witness examined on the side of opposite party
DW1-Baby.A.V, Insurance Surveyor
DW2-P.Sugumaran, Insurance Surveyor
Court Exhibits
Ext.C1 series-Report from Pattambi Police Station Crime No.572/08 u/c Fire occurance.
Cost allowed: Rs.500/- each allowed as cost of the proceedings.
DISTRICT CONSUMER DISPUTES REDRESSAL FORUM PALAKKAD
Dated this the 25th day of March 2011
Present : Smt.Seena H, President
: Smt. Preetha.G. Nair, Member
: Smt. Bhanumathi.A.K, Member Date of filing: 10/08/2009
(C.C.No.92/2009)
M/s.Associated Steel Industries
Rep.by its Managing Partner
Mr.P.P.Muhammad,
S/o.Moidu,
4/468 Kolikkottusseri,
Pattambi,
Palakkad - Complainant
(By Adv.P.Gopinathan)
V/s
M/s.Reliance General Insurance Co.Ltd.
First Floor, Vishnu Building,
K.P.Vallon Road, Kadavanthara,
Cochin – 682 020.
(By Adv.S.Mammu) - Opposite party
O R D E R
By Smt.SEENA.H, PRESIDENT
In short, the case of the complainant is as follows :
Complainant is the Managing Partner of Associated Steel Industries. Complainant availed two policies from opposite party, of which one is a standard fire and special perils policy. On 5/8/2008, there was a fire in the factory which led to complete destruction of the property. A complaint was filed before the Pattambi Police Station. The Police investigated the loss through PWD Engineer and it was assessed as Rs.29,00,000/- According to the complainant he has sustained loss to the tune of Rs.35,00,000/- Opposite party without any reason assessed damaged as Rs.254710/- and issued cheque for the said amount which was accepted by the complainant under protest. The assessor of the opposite party has visited the site without any notice to complainant. Complainant issued a lawyer notice dated 23/04/2009 to opposite party claiming the insurance amount of Rs.35,00,000/- but opposite party in their reply was sticking on to their assessment. The sum assured as per the policy is Rs.55,00,000/- According to the complainant, the assessment made by the opposite party is without any basis. The act of opposite party amounts to clear deficiency in their part and hence the complaint.
Opposite party resisted the allegations of the complainant with the following contentions.
Opposite party admitted the policy and the incident. According to the opposite party, the complainant has availed another standard fire and special perils policy from the Oriental Insurance Company Ltd., Pattambi. Under the said policy the stock, plant and machinery and building were insured for Rs.15,00,000/- Rs.20,00,000/- and Rs.10,00,000/- respectively. Complainant suppressing this fact has filed this complaint. Without including Oriental Insurance Company in the party array, complaint is bad for non joinder of necessary party.
The policy issued by opposite party for the period 1/1/2008 – 31/12/2009 for building and machinery, stock of raw materials and finished goods is for a sum of Rs.15,00,000/-, Rs.30,00,000/- and Rs.10,00,000/- respectively. On receipt of survey report and after obtaining consent from the complainant, claim was settled for Rs.2,54,710/- The averment of the complainant that it was received under protest is denied by opposite party. It is also submitted by opposite party that the net assessment of loss by the surveyor was Rs.4,41,250/- After deducting the liability of the Oriental Insurance Company, the liability of the opposite party was assessed as Rs.2,54,710/- The amount was given to the complainant as full and final settlement. Hence no deficiency of service on the part of the opposite party.
Both parties filed their respective affidavits. Ext.A1 to A11 marked on the side of the complainant. Ext.B1 and B2 marked on the side of the opposite party and Ext.C1 also marked. DW1 and DW2 examined.
Issue that arises for consideration are
1.Whether there is any deficiency in service on the part of the opposite
party ?
2,If so, what is the relief and cost complainant is entitled to ?
Issue No.1
On going through the rival submissions of both parties, it is understood that the policy and the happening of the incident within the period of the policy is not disputed. According to the complainant, the loss as assessed by the PWD is for Rs.29 Lakhs. Opposite party on the other hand contented that the net loss assessed by them after depreciation is Rs.4,41,250/-. After deducting the liability of the Oriental Insurance Company, from whom the complainant has availed another fire and standard perils policy, opposite party has paid Rs.2,54,710/- as full and final settlement of the claim.
On going through the evidence on record it is seen that there are three independent assessment as to the loss of the same building. As per Ext.B1 and B2, the Surveyor deputed by Opposite party and Oriental Insurance Company assessed loss to the tune of Rs.687500 + Rs.441250. The Assistant Engineer, PWD at the requisition of Sub Inspector of Pattambi Police Station has assessed loss to the tune of Rs.29 lakhs. DW has deposed that the assessment is made as per the terms and conditions of the policy. PW1, on the other hand assessed loss as per the Govt. norms. PW1 has deposed with regard to the assessment of loss as follows :
]Xn\mev hÀjw ]g¡apÅ _nÂUnwKv BsW¶mWv Age Certificiate DÅXv. Rm³ sNÃpt¼mÄ Outline Structure am{Xta Dmbncp¶pÅp. Completely destroyed Bbncp¶p. Buildingsâ Plinth area X rate for a tiled roof as per technical circular of CE 2008 X depreciation constant for 14 years F¶ coXnbnemWv assess sNbvXXv. Calculation statement Bbn R§Ä¡v sImSpt¡ BhiyanÃ. Report am{Xta sImSpt¡XpÅp.
The report filed by the Surveyor deputed by the Insurance Company is not based upon any specific norms. Moreover, the assessment made by a Govt.official seems to be more reliable one.
None of the surveyors has reported damage as to the machinery or stock in the buildings. Even though the complainant while cross examination has stated that loss of machinery was assessed by a technical expert and report is with the complainant, nothing was brought on record. Allegations of the complainant to that aspect stands unproved.
Opposite party has raised a contention that the amount of Rs.254710 was received by the complainant as full and final settlement of the claim. If that be so, definitely there will be an endorsement or acknowledgement to that effect. Opposite party has not adduced any evidence to prove this aspect.
With regard to the contention that the Oriental Insurance Company is a necessary party, we are of the view that there is no bar as to the number of policies to be availed by a person. Insured is free to make claim in case of loss to any one of the Insurance company. The only bar is that amount cannot be claimed from both insurance companies.
In view of the foregoing discussions we are of the view that opposite party has committed deficiency in service in assessing loss and disbursement of claim amount.
Issue No.2
As per Ext.10 the net loss assessed by the PWD Engineer is 29 lakhs. Complainant has limited the claim to 19 lakhs. As per Ext.A3 the maximum limit of insurance claim for the building is Rs.15 lakhs. Opposite party has paid Rs.254710/- to the complainant. The Oriental Insurance Company has paid Rs.186540 to the complainant. Hence opposite party is liable to pay complainant the balance amount deducting the payment already made by both insurance companies which amount to Rs.10,58,750
In the result complaint allowed.. Opposite party is directed to pay complainant Rs10,58,750/- being the balance claim amount together with Rs.20,000/- as compensation and Rs.1000/- as cost of the proceedings. Order shall be complied within one month from the date of receipt of order failing which the whole amount shall carry interest at the rate of 9% per annum from the date of order till realization.
Pronounced in the open court on this the 25th Day of March 2011.
Sd/-
Seena H
President
Sd/-
Preetha G Nair
Member
Sd/-
Bhanumathi.A.K.
Member
APPENDIX
Exhibits marked on the side of the complainant
Ext.A1 – Carbon Copy of lawyer notice dtd.23/4/2009 issued to Opposite party
with original postal receipt and akcnowledgement card.
Ext.A2 – Original reply notice sent by the opposite party to the complainant’s
counsel dt.11/5/09 with cover
Ext.A3 – Original Policy No.2202382111100010 of the Reliance General
Insurance Co.
Ext.A4 – Original Policy No.2202382911100002 of the Reliance General
Insurance Co.
Ext.A5 – Copy of FIR in Cr.572/08 of Pattambi Police Station
Ext.A6 – Copy of the report of the Assistant Engineer, PWD Building section
Pattambi, dt.1/4/09
Ext.A7 – Copy of letter addressed to Asst.Engineer PWD Pattambi by SI of Police
Pattambi dt.10/10/08
Ext.A8 – Copy of certificate issued by Muthalamada Grama Panchayath
dt.1/12/08
Ext.A9 – Copy of plan of main building prepared by Shameer A.
Ext.A10 – Copy of letter to SI, Pattambi by Asst.Engineer, PWD Building section
Pattambi
Ext.A11 – Copy of Technical Circular dt.18/1/08 of the Chief Engineer, PWD,
NH and Administration, Trivandrum
Witness examined the side of the complainant
PW1 – Smesha P.P. Asst. Engineer, PWD Building Section, Pattambi
PW2 – P.P.Mohammed
Exhibits marked on the side of the opposite parties
Ext.B1 – Survey Report of Babu A.V. Insurance Surveyor dt.27/1/09
Ext.B2 - Survey Report of Dr.P.Sugumaran, Insurance Surveyor dt.12/1/09
Witness examined the side of the opposite party
DW1 – Baby A.V. Insurance Surveyor
DW2 – P.Sugumaran, Insurance Surveyor
Court Exhibits
Ext.C1 series – Report from Pattambi Police Station om Crime No.572/08 u/c
Fire occurance.
Cost
Rs.1,000/- allowed as cost of the proceedings.
